Honda-Nissan Merger Could Create $54 Billion Automotive Giant

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A potential merger between Honda and Nissan would create a company valued at $54 billion, producing 7.4 million vehicles annually and becoming the third-largest automotive group globally. This follows a strategic collaboration in March to advance electric vehicle development, amidst Nissan's financial and strategic challenges. While Honda shares fell, Nissan and Mitsubishi saw significant increases.

A merger between Honda and Nissan would result in a company valued at $54 billion, with an annual production of 7.4 million vehicles. This would position the combined entity as the third-largest automotive group globally by sales volume, following

The two companies had already established a strategic collaboration in March to advance electric vehicle development. However, Nissan’s increasing financial and strategic challenges in recent months have heightened the need for closer ties with its larger competitor, Honda.), a major Nissan shareholder, the deal would have “mostly positive implications” including “a number of benefits and strategic options,” Jefferies analysts said.

Furthermore, the analysts note a potential share swap within the cross-shareholding structure, which could effectively act as a 15% buyback for Renault without requiring cash. Jefferies estimates that, under a nil-premium merger scenario based on current closing prices, Honda shareholders would control approximately 84% of the combined equity, while Renault’s 35.8% stake in Nissan, valued at €2.78 billion, would be diluted to a 5.8% stake, with 2.8% linked to its core holding and 3% attributed to shares held for sale.

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